Bitcoin, Ethereum, Dogecoin Edge Higher As Market Braces For Trump's 'Liberation Day:' Why Arthur Hayes Still Sees BTC Hitting $250,000 By Year-End

As the cryptocurrency market braces for Donald Trump’s ‘Liberation Day,’ Bitcoin, Ethereum, and Dogecoin have all edged higher, with Bitcoin trading just under the $85,000 mark. The market sentiment, as measured by the Fear & Greed Index, stands at 34, indicating a cautious but hopeful outlook among traders. This comes as the cryptocurrency sector has added $54 billion in the last 24 hours, driven by recent Bitcoin purchase announcements from several US-based firms and the upcoming Congress stablecoin legislation review.



Arthur Hayes, the former CEO of BitMEX, has made a bold prediction that Bitcoin could hit $250,000 by the end of 2025. His forecast is based on a detailed analysis of US dollar liquidity dynamics and their impact on global financial markets. Hayes believes that the Federal Reserve’s Reverse Repo Facility (RRP) and the US Treasury’s General Account (TGA) will play crucial roles in driving Bitcoin’s price upward.

Hayes notes that since Bitcoin bottomed in Q3 2022, its price has closely followed declines in the RRP. He expects a $237 billion liquidity injection from adjustments to the RRP rate, which would offset the Federal Reserve’s quantitative tightening (QT) by the end of Q1 2025. This liquidity injection is a key factor in his prediction of a market peak in mid-March 2025.

Additionally, Hayes predicts that the Treasury’s temporary halt on new debt issuance during debt ceiling negotiations will boost liquidity. Based on historical spending, he anticipates the TGA could deplete by 76% by March, coinciding with his projected market peak. This depletion would release significant liquidity into the market, further supporting his forecast.

However, Hayes also warns of potential risks from geopolitical events and economic policy shifts, including actions by China and the Bank of Japan. He advises investors to sell in late Q1 before tightening liquidity triggers market corrections in Q2, stating: "Sell in the late stages of Q1, then chill."



The political and regulatory environment under the Trump administration could significantly influence the trajectory of Bitcoin and other cryptocurrencies. During the 2024 US presidential election, Bitcoin surged to new all-time highs, surpassing US$100,000, as pro-crypto sentiments fueled investor confidence. This demonstrates how political narratives and potential policy shifts can drive market volatility.

Regulatory developments under the Trump administration could also reshape crypto valuations. The US Securities and Exchange Commission (SEC)’s approval of spot Bitcoin exchange-traded funds (ETFs) in early 2024 triggered substantial market movements, illustrating how political and regulatory decisions can potentially reshape crypto valuations. This approval attracted significant institutional investment, legitimizing crypto as a mainstream asset class.

Investors should prepare for potential shifts in policy by staying informed about the Trump administration's stance on cryptocurrencies and digital assets, as well as any regulatory developments or changes in economic policy. They should also be prepared for market volatility and potential corrections, and consider adjusting their investment strategies accordingly.

In conclusion, while Arthur Hayes' prediction of a Bitcoin peak in mid-March 2025 is supported by historical liquidity dynamics and market trends, geopolitical events, economic policy shifts, and market volatility could potentially disrupt this forecast. Investors should remain cautious and prepared for potential market corrections as the cryptocurrency market continues to evolve.